MTC enacts amendments to broadband law

31 Jan 2020

Peru’s Ministry of Transport and Communications (Ministerio de Transportes y Comunicaciones, MTC) has implemented an amendment to the 2012 law on the promotion of broadband services, which also set out the guidelines for the construction and management of the National Fibre Optic Backbone (Red Dorsal Nacional de Fibra Optica or RDNFO). The law intended to help close the digital divide with the deployment of a fibre backbone network spanning more than 13,000km and connecting 22 regional capitals and 180 provincial capitals. The network was completed in 2016 but was subsequently found to have been ineffective in achieving its goals, with changes in the market and the inflexibility of the governing regulatory structure blamed for the system’s shortcomings. As noted by TeleGeography’s GlobalComms Database, the rapid construction of rival networks and the commercial limitations of the RDNFO led to capacity on the network becoming overpriced in comparison to its competitors and the system was left under-utilised: capacity demand on the network for June 2018 had been projected to be around 137Gbps, but actual usage was just 21Gbps at that date.

The regulator was unable to address the matter directly, however, as the rules for the RDNFO were enshrined within the 2012 legislation (Law 29904, Law for the Promotion of Broadband and Construction of the RDNFO) and would require a longer amendment process. The MTC announced a full review of the programme in October 2018 and published proposals in July the following year. Supreme Decree 002-2020-MTC was passed on 24 January 2020 and amended four articles of Law 29904, lifting several restrictions on the RDNFO operator, providing it with greater commercial flexibility with regards to the services it can provide and how it sets prices. At present, the RDNFO operator is Azteca Communications, but the company has submitted a proposal to the MTC to withdraw from the scheme.